31% of Crypto Novices Making Mistakes by Following Friends, Advisor Warns
In the wave of digital currency, more and more novices are attracted by its potential high returns and are stepping into the cryptocurrency world. However, trading is not a smooth path. A recent study revealed that nearly a third (31%) of new cryptocurrency investors relied primarily on a friend’s suggestion when buying crypto in 2025. This trend is raising concerns among advisors who warn that blindly following recommendations can lead to significant financial mistakes.
The Danger of Following Uninformed Advice
Buying bitcoin, ethereum, and other digital assets just on the basis of a friend's recommendation may lead to trouble, experts say. Investors may not understand the underlying technology or the risks involved. This is especially concerning because 31% of crypto novices are making mistakes due to this lack of knowledge.
Common Mistakes New Crypto Investors Make
There are many mistakes new and experienced cryptocurrency investors can make. Learn as we uncover the pitfalls that beginners often stumble into. From overlooking real-world utility to letting emotions take the wheel, beginners frequently fall into traps that can drain their wallets and confidence. Here are the 10 most common mistakes new crypto investors make and how you can avoid them.
- Investing without understanding the technology
- Failing to research different cryptocurrencies
- Ignoring risk management strategies
- Being swayed by hype and FOMO (Fear of Missing Out)
- Storing crypto assets insecurely
- Falling for scams and phishing attacks
- Overtrading or day trading without experience
- Not diversifying their portfolio
- Letting emotions drive investment decisions
- Ignoring tax implications
Why Newbies Struggle: A Deeper Look
A recent study published by the Financial Industry Regulatory Authority, the Investor Education Foundation, and NORC at the University of Chicago has revealed that many new crypto users are unprepared for the complexities of the market. Our analysis reveals that even popular wallets are not designed for novice users' needs, stopping them when they would be ready to engage with the technology. This lack of user-friendliness, combined with reliance on potentially biased advice, creates a perfect storm for errors.
How to Avoid Costly Mistakes: A Beginner's Guide
Avoiding common mistakes protects investments and promotes informed decision-making. Key strategies include educating yourself on cryptocurrency fundamentals.
- Educate Yourself: Understand the basics of blockchain technology, cryptocurrencies, and the market dynamics.
- Do Your Research: Don't rely solely on friends' recommendations. Research different cryptocurrencies, their use cases, and their potential risks.
- Manage Your Risk: Only invest what you can afford to lose. Don't put all your eggs in one basket.
- Secure Your Assets: Use secure wallets and follow best practices for protecting your private keys.
- Stay Informed: Keep up-to-date with the latest news and trends in the crypto world.
By taking the time to educate yourself and avoid common pitfalls, you can navigate the crypto market with confidence and protect your investments. Remember, knowledge is your greatest asset in the world of cryptocurrency.